Scottish independence: Swinney’s pension promise

John Swinney: 'We will uprate pensions by the highest [option]'. Picture: Ian Rutherford

EDDIE BARNES

JOHN Swinney yesterday sought to defuse anxiety over the impact independence will have on pensions by insisting a so-called “triple lock” guarantee would remain intact if people vote Yes next year.

The SNP finance secretary insisted at a conference in Glasgow that, following the creation of an independent country in 2016, the Scottish Government would ensure the basic state pension in increased by the rate of earnings, inflation or 2.5 per cent, whichever was higher.

He said the promise would offer “peace of mind” to pensioners who, under UK government plans now going through parliament, will be moved onto a new single-tier pension of £144 a week.

The pledge, made at a conference organised by the Institute of Chartered Accountants in Scotland, was greater than that offered by UK ministers, Mr Swinney claimed, with Westminster’s pledge running only until the general election in 2015. But the viability of the offer – described as “open-ended” by officials – was challenged.

Pro-Union figures speaking at the conference said an independent Scotland would have to deal with the cost of new regulation and cope with a rapidly ageing population.

The announcement comes with the SNP under significant pressure on pensions, a key issue. As well as the affordability of the state pension, Icas has warned that EU rules will force private schemes that flow across the Border to be fully funded – at an estimated cost of £170bn.

Mr Swinney told the conference that a paper on pensions after independence would be published soon, providing further details.

The finance secretary revealed the government’s plans after independence takes place, estimated at April 2016.

The state pension would be at the level set by the UK government in that year, he said. Those who had already retired would continue to receive the basic state pension, likely to be about £118.60. The new single-tier pension would also be uprated for 2016, he said. At present, UK ministers have promised this increase only as far as 2015.

He said: “The day after independence, pensioners can be reassured they wlll receive the same level of state pension as they did the day before. But they will have the additional commitment that we will uprate both forms of pension by the highest of earnings growth, inflation or 2.5 per cent.”

Shadow pensions minister Gregg McClymont, also attending the conference, said the cost would be “significant”.

He added: “The UK pension system is built and sustainable and it has a sizeable population spread that enables risk-sharing to Scotland’s benefit.”